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(Alliance News) - Jadestone Energy Inc on Friday sad it has started arbitration proceedings against Inpex Corp subsidiary Teikoku Oil (Con Son) Co Ltd over the Block 05-1 production sharing contract in offshore Vietnam.
Jadestone signed a definitive sale and purchase agreement with Teikoku in August 2016 to buy a 30% working interest in the block for USD14.3 million subject to normal closing adjustments.
However, in Feburary 2018 Inpex sent a purported notice of termination of the agreement despite Teikoku having obtained a waiver from Vietnam Oil & Gas Group of statutory pre-emption rights plus and direction from Petrovietnam submit all documents needed to transfer the 30% interest to Jadestone.
Jadestone has not accepted the alleged termination as takes the view that all obligations under the sale and purchase agreement remain in place.
Jadestone and Inpex negotiated in 2018 and 2019, with Jadestone still hoping to secure interest in the block. Having now assesses all options, Jadestone has decided to challenge the purported termination and "seek specific performance by Teikoku to fulfil its obligations".
As such, the Asia Pacific-focused oil and gas production company has filed notice of arbitration with the Singapore International Arbitration Centre.
President & Chief Executive Paul Blakeley said: "We intend to complete our planned acquisition of a 30% interest in Block 05-1 from Inpex. Prior to the purported termination, the parties had worked together and made very substantial progress toward closing the deal, a process which included Inpex requesting that the deal not be terminated even after the long stop date had passed, and with the objective of obtaining Petrovietnam's waiver of their pre-emptive rights, which was then achieved in early February 2018.
"While commencing arbitration is never an easy decision, we have exhausted all avenues to come to an amicable conclusion, and now feel Inpex's continued unwillingness to complete the SPA constitutes a material breach of their obligations, to the detriment of potential value for Jadestone shareholders."
Shares in Jadestone were down 1.6% at 65.94 pence in London on Friday morning.
By Anna Farley; annafarley@alliancenews.com
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